The Next Ethereum Killer App is Already on the Way
December 18, 2017
No matter how silly it may sound, but a popular CryptoKitties might mark a new mass trend of using Ethereum - digital collectibles.
CryptoKitties quickly became the most popular Ethereum app - so popular that there is now CryptoPuppies, and CryptoPets (which let users choose any digital animal pet they prefer).
But while some in the crypto community are skeptical of this new trend, others see CryptoKitties as a pioneer in the possible use of Ethereum technology.
Strangely enough, your favorite Cryptokitten is made by a powerful technical standard underlying CryptoKitties called Ethereum Request for Comments 721 (ERC-721).
"People have been talking about ERC-721 for a long time, but nobody realized it before. CryptoKitties was the first, "said Philipp Kastonguey, the developer relations manager for the cryptocurrency exchange protocol 0x, adding:
"There is a very big market incoming for the ERC-721."
According to many crypto developers, ERC-721 is better done for digital collectibles than ERC-20.
To begin with, tokens created with ERC-20 are "fungible", which means that each token is as good as any other token, for example, every dollar is as good as any other U.S. dollar.
Although this is a necessary property for a currency, it is not helpful for collectibles, such as CryptoKitties, because different Cryptocats must have unique attributes such as age, breed or color permanently attached to them. Therefore, some attribute’s mixture can be rare enough, which makes them not only very popular, but also extremely valuable.
Secondly, ERC-20 tokens are divisible, which means that users can divide them up into small amounts for buying, selling or trading. Although this property, again, is useful for currency, it is not helpful for collectibles, since the cost of them directly depends on their state. In CryptoKitties, half a cat would not be as funny or valuable to have.
In so doing, there are still challenges related to the ERC-721. Despite the fact that it is quickly gaining traction and is already being used, it is still insufficiently developed. Moreover some developers are rather unhappy with its code.
Following the success of CryptoKitties, startups and developers are beginning to show increasing interest in ERC-721 as a way to simplify the use of crypto assets.
James Martin Duffy, co-founder of startup LoomX, which is working on scaling infrastructure for Ethereum, said that he is planning to roll out projects using this standard in the future:
"I'm sure ERC-721 tokens have a huge potential in the realm of digital collectibles and online games," Duffy said. "You can use them for digital playing cards ... or game items in MMORPG. Tokens can represent the swords, armor and other items that your character has in his inventory."
And it doesn’t stop there. According to Duffy, ERC-721 can also facilitate tracking, trading and managing real-world assets, such as houses or cars.
Despite the fact that most part of information sounds astonishingly, it is important to understand that nowadays the most popular online video games are CCG (Collectible card games, for example Hearthstone from Blizzard) and MMO games with a huge amount of unique "random piece" (randomly dropped unique items that affect the game).